Millions of Safaricom users will be able to purchase for items costing up to 100,000 shillings and pay later thanks to the company’s upcoming introduction of a zero-interest credit program.
The Faraja service is an initiative aimed at upending the mobile loans market.
Users of Faraja will be able to pay the same amount for goods and services starting at 20 shillings and up to 100,000 shillings without being charged any additional fees or default penalties.
This new credit service would enable clients to walk away with goods and services from a list of chosen merchants without being compelled to pay upfront, unlike Lipa Later, a comparable service that is already available on the market.
Depending on their credit score, the service will give users a credit limit of up to 100,000 shillings to make purchases and pay them back within the provided 30-day window.
The normal M-PESA transaction fees will be applied at the point of sale for the Equity Bank-backed product.
According to a statement on Safaricom’s website, “you will only be obliged to settle the outstanding facility amounts advanced to you by us using the specified Paybill number or such other channels as supplied by us from time to time.”
The product is expected to compete with more expensive credit products like its own Fuliza, KCB-Mpesa, Mshwari, and digital credit providers like Tala and Branch while also promising to change the game in the mobile loans industry.
The increase in Lipa na Mpesa transactions at particular stores presents an opportunity for Safaricom and Equity to generate revenue.
Several stores, including Naivas Supermarket, Goodlife Pharmacy, and Citi Walk, have already signed up to be merchants.
As we thank you for your readership kindly tell a friend about this story